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Annual Salary (pre-tax): $31,000. While your annual salary may be higher or lower, $31,000 is the median income in the U.S. This is a critical piece of ...

But first, make sure you’re contributing enough to your 401(k) to get the maximum matching contribution from your employer; only then should you consider saving more money in an IRA or a taxable investment account. You can contribute up to $20,500 to your 401(k) account in 2022, or $27,000 if you’re 50 or older. By allowing you to defer (or avoid entirely) paying taxes on your investments, these accounts, like traditional and Roth 401(k)s, help you grow your balance faster than if you invested with a taxable investment account. But for the federal government, 62 is the official age when you canclaim Social Securitybenefits. It’s also worth noting that 59 ½ is the age at which you can start making withdrawals from your 401(k) plan free of any IRS penalties. In addition to age, your own personal risk tolerance should guide your retirement investing choices. If you’d like to save even more for retirement, consider opening an individual retirement account (IRA), which gives you another $6,000 in tax-advantaged contributions, or $7,000 if you’re 50 or older. Contributing to a 401(k) is one of the best ways to prepare for retirement. To get the most out of this 401(k) calculator, we recommend that you input data that reflects your retirement goals and current financial situation. Experts suggest this amount should let you maintain your current lifestyle in retirement. 401(k) plans let you invest inmutual fundsand index funds, growing your savings over time. - Employer Match: 5%. Many employers choose tomatch you 401(k) contributionsup to certain limits. Your salary may increase more or less than this average, but it’s generally safe to assume your income will keep up with inflation, which historically has grown at a rate of about 2% per year.